dailynewsnblog
Listen to this article
Estimated 4 minutes
The audio version of this article is generated by AI-based technology. Mispronunciations can occur. We are working with our partners to continually review and improve the results.
Three of Canada’s big banks shared cautiously sunny outlooks for the economy on Thursday, sharply contrasting expressions of anxiety and frustration from scores of smaller businesses grappling with the fresh reality of a full-blown trade war with the United States.
Royal Bank of Canada, Toronto-Dominion Bank, and CIBC reported financial results before Thursday’s opening bell on the Toronto Stock Exchange.
Together, this trio of Canadian banking giants has as much as $6 trillion worth of assets on their balance sheets. With vast portfolios of mortgages, auto loans and other debt products for consumers and businesses, and client networks spanning Canada and the U.S., these goliath institutions have a unique vantage point from which to monitor the impact of tariffs.
“The Canadian economy has proven to be resilient. The improvements in employment and GDP seen in Q2 maintain a cautiously optimistic outlook that the economy will continue to expand,” RBC CEO Dave McKay said on the bank’s quarterly conference call Thursday morning.
“While Canada and the U.S. have yet to come to a longer-term solution, we note the average effective tariff rate remains low, at approximately six percent, with over 80 per cent of exports remaining duty-free.”
Investment ‘super cycle’ to the rescue
On Thursday, TD Bank CEO Raymond Chun referred to an emerging “super cycle” for investment in Canada, spurred by government spending in areas like infrastructure and national defence. According to TD Economics, Ottawa and the provinces have over $1 trillion in announced projects already approved or on the table through 2035 and beyond.
“In Canada, trade tensions have not dampened investment opportunities, as governments seek to drive new activity,” Chun said.
“More could be rolled out across Canada over the coming decade in a historic investment super cycle,” he added. “We are very well positioned to benefit from this activity.”
CIBC CEO Harry Culham said he has “measured confidence” about the back half of 2026.
“The trade environment will continue to evolve, and we are not going to speculate on where it lands,” he said on Thursday, speaking on his bank’s conference call with stock market analysts.
CIBC chief risk officer Frank Guse said that CIBC is closely monitoring Canada’s labour market for signs of weakness.
A recent Oxford Economics study prepared for the Canadian American Business Council found more than 100,000 Canadian jobs could be lost if the Canada-U.S.-Mexico Agreement (CUSMA) was eliminated.
BMO Capital Markets predicts the latest round of U.S. tariffs will carve roughly half a percentage point from Canadian growth, mostly through weaker business confidence and investment.
U.S. Trade Representative Jamieson Greer tells CBC chief political correspondent Rosemary Barton that Canada wanted ‘too much’ from the U.S. in trade negotiations. In the Canadian exclusive interview — the first one-on-one the Trump administration has done with Canadian media since the trade dispute entered this new phase — Greer denies the Canadian assertion that the U.S. added last-minute conditions to the Canada-U.S. draft deal that fell apart.
On Wednesday, National Bank’s CEO Laurent Ferreira said Canada’s economy has “demonstrated resilience” over the past 18 months. Like his peers, he also praised Ottawa’s large-scale investment plans, as well as the newly announced government aid measures for workers and businesses impacted by U.S. tariffs.
“Energy, power infrastructure, and the recent icebreaker contract announcement are great examples of our country moving in the right direction,” Ferreira said, referring to a commitment announced by the federal government to build six icebreaker ships in Quebec.
He also praised the Office of the Superintendent of Financial Institutions’ June decision to lower its domestic stability buffer, allowing banks more flexability to lend to struggling businesses.
On Tuesday, the CEO of Bank of Montreal and Scotiabank separately called the Canada-U.S. trade war manageable.
On the Toronto Stock Exchange, shares of Canada’s big banks continue to trade near all-time highs. The iShares S&P/TSX Capped Energy Index ETF, a basket of Canadian bank stocks, has soared over 46 per cent year-to-date.
